Abstract: The Emergence of a Canadian Brewing Oligopoly: The Rise of the “Big Three,” 1945-1962
In the midst of the Second World War, Edward Plunkett Taylor, the outspoken President of Canadian Breweries Limited, issued a statement that signaled that the business of brewing would soon be heading in a new direction. “There are too many breweries in all of the provinces,” he stated, “and there is a golden opportunity to sell our products in the entire country.” At the time, the biggest breweries in Canada were regional concerns without national brands. But during the next two decades, a national brewing oligopoly emerged. This paper analyses the factors that led to the emergence of a brewing oligopoly in Canada. It examines the corporate strategies and structures that gave rise to the “big three.” While the consolidation of the Canadian brewing industry occurred at the same time as the emergence of a national brewing oligopoly in the United States, the factors leading to its appearance were distinctively Canadian. The paper thus reveals the importance of institutional factors in explaining the post-war dynamics of market structure in Canadian brewing. Provincial regulations on the importation and distribution of beer as well as federal restrictions on alcohol advertising, combined to make the acquisition of small- and medium-sized firms the main route towards market consolidation. Within this environment, the “big three” exploited their comparative advantages in order to create a national market for their brands.